Financial market development is widely seen as a key driver of economic performance because it improves capital allocation, mobilises savings, and raises investment efficiency. This study examines both long-run and short-run links between financial market development and economic growth in India using 22 years of annual time-series data. Net National Income (NNI) serves as the measure of economic growth, while financial market development is proxied by Mutual Fund Assets under Management (MFAUM), Life Insurance Corporation (LIC) investments, total capital mobilisation, gross capital formation, the call/notice money rate, consumer price inflation, and the trade balance. In this article the researcher assess the stationarity of the series with the Augmented Dickey–Fuller (ADF) test. Finding a mix of I(0) and I(1) variables and no I(2) series, we employ the Autoregressive Distributed Lag (ARDL) bounds testing framework to estimate the long-run equilibrium relationship and short-run dynamics. Results indicate a significant cointegrating relationship: the bounds test F-statistic exceeds the upper critical value. The error-correction term is negative and significant, implying a swift return to long-run equilibrium after short-term shocks. Of the financial market indicators, only Mutual Fund Assets under Management shows a positive and statistically significant long-run impact on NNI, underscoring the growing role of the mutual fund industry in India’s economic development. LIC investments, total capital mobilisation, gross capital formation, inflation, interest rate, and trade balance are not significant in the long run in this model. Diagnostic checks show no serial correlation or heteroskedasticity, residuals approximate normality, and the model is correctly specified, supporting the robustness of the findings. Overall, the evidence aligns with the finance-led growth hypothesis and suggests that strengthening the mutual fund sector can support India’s long-term growth.